pm’s 36th annual survey: money management 2 · d pms did more with less as evidenced by data...

DPMs did more with less as evidenced by data collected for Podiatry Management’s 36th Annual Survey. The 1,138 respondents reported lower median gross and net incomes overall, perhaps related to the larger percentage of new doctors surveyed. Meanwhile, our respondent pool as a whole appeared to tackle big expenses head-on. They cut spending on their three most costly items: salaries, office space and student loans. At the same time,

they invested in areas that could have a long-term, positive impact: equipment, advertising and prod-ucts for sale. And they boosted pensions—especially for their staffs. What’s more, a larger percentage of doctors worked in partnership/group practices than in our previous survey. These team members outearned their solo colleagues by $26,000. Diabetes was more prevalent in respondents’ practices, and a higher percentage of patients re-quired wound care. Perhaps due to low reimbursements, DPMs surveyed relied less on managed care organizations (MCOs) for both patients and income. Technology appeared to drive change in multiple aspects of practice, from diabetes manage-ment to treatment devices. Tech is positioned to play an even bigger role in how doctors practice in the future. Clinical care, staffing, deliveries, and even how fast new medications come to market are expected to evolve with emerging advances such as artificial intelligence (AI) and robotics. Here is a breakdown of the survey data, including an analysis of its significance and trends that may impact the profession in the future.

PM’s 36th Annual Survey:

BY STEPHANIE KLOOS DONOGHUE

www.podiatrym.com FEBRUARY 2019 | PODIATRY MANAGEMENT

83

PODIATRIC ECONOMICS

Continued on page 84

In the new era of emerging technologies and shrinking reimbursements, DPMs surveyed combat the challenges of lower

incomes with cost cutting and selective spending.

Money Management2.0

The companies and organizations listed at the end of this report are the sponsors for this year’s Annual Practice Survey. They have made it possible for PM to collect, organize, and disseminate the formidable amount of data used to create this once-a-year analysis of the profession. Please support them by emailing, calling, or visiting their websites.

www.podiatrym.comFEBRUARY 2019 | PODIATRY MANAGEMENT

84

PODIATRIC ECONOMICS

to 100,000) jumped four percent-age points to 34 percent of the re-spondents. Meanwhile, participation dropped for doctors in the other three practice locations—metropolises at 24 percent (population of more than 500,000), down from 26 percent;

large cities at 27 percent (popula-tion of 100,000 to 500,000), down from 28 percent; and rural areas at 14 percent (popu-lation of less than 25 ,000) , down from 16 percent. Based upon reports from a va-riety of sources, we may see a shift of doctors practicing in more dense-

New York Still on Top; Texas Moves up As it did in our previous survey, New York remained the state with the highest percentage of respondents, with 15.6 percent of DPMs practicing there. The top five list included doctors from Florida (8 percent), New Jersey (7.7 percent), Texas (7.6 percent) and California (7.2 percent). All were in the top five previously except for Texas, which replaced Pennsylvania (now in sixth place with 5.1 percent of respondents). Our survey responses mirrored national data and age-related population trends. According to the U.S. Census Bureau (USCB), the top five most populous states in 2017 (our survey year) were California, Texas, Florida, New York, and Pennsylvania. This USCB lineup was similar to last year except that Illinois was in fifth place and Pennsylvania was in sixth. In addition, three of our five top states in terms of respondents had the highest population growth in the nation compared to 2016: Texas, Florida and California. USCB data also indicates that the 65-and-older age group—a key target market for podiatrists—grew 3.2 percent despite a less than 1 percent growth rate for all age groups nationally. Data filtered by state and age uncovered the top five states with populations of 65+: California, F lor ida, Texas, New York, and Pennsylvania. The next five states were Illinois, Ohio,

Michigan, North Carolina, and New Jersey. Interestingly, our participation from respondents in the latter five states increased slightly from 19.6 percent in our previous su rvey t o 21 . 4 percent this year. Perhaps this is an indication that the larger proportion of new DPMs surveyed (see “More New Doctors Surveyed” below) were drawn to states that had a higher-than-average potential for practice growth. Regionally, the migration South that we have covered in previous reports continued during the latest survey period. Sou the rn s t a t e s as a group ranked highest in terms of population increase by both percentage and number o f residents (all age groups combined). In second place for growth was the West, followed by the Midwest and the Northeast.

Small Cities Continue to Reign The percentage of doctors in small cities (population of 25,000

Survey (from page 83)


Note: Chart numbers may not equal 100% due to rounding.

Practice Location

Rural(Less than 25,000) Small City

(25,000–100,000)

Large City (100,000–500,000)

Metropolis(500,000 or more

population) 27%

24%

34%

14%

New York

Florida

New Jersey

Texas

California

Pennsylvania

Illinois

Ohio

Michigan

Georgia

Massachusetts

Maryland

Washington

Wisconsin

Arizona

Indiana

N. Carolina

Missouri

Virginia

15.6%

8.0%

7.7%

7.6%

7.2%

5.1%

4.7%

4.0%

3.3%

2.8%

2.6%

2.4%

2.0%

1.8%

1.7%

1.7%

1.7%

1.4%

1.4%

State of PracticeDistribution of respondents—top statesCHARACTERISTICS

OF RESPONDENTS& TRENDS

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PODIATRIC ECONOMICS

percent this year. Doctors practicing in partnership/group arrangements (all types combined) grew from 35 percent last year to 43 percent in our lat-est survey. For the first time, we broke out the percentage of doctors in partnership/group prac-tices into two categories: those in groups with

other DPMs (24 percent), and those in multidisciplinary group practices (12 percent). Twelve percent of those surveyed indicated that they worked in practice settings not listed here, down from 17 percent previously. Respondents listed hospitals (Veterans Administration fa-cilities and others), primary care clinics,

academia, community health centers, Indian Health Service, health mainte-nance organizations (HMOs), assisted living facilities and nursing homes. Twenty-six percent of those surveyed said that they hired other DPMs, down slightly from 27 percent in our previous survey. New cross-tabulating of type of practice setting by sex showed a sig-nificantly higher percentage of men than women were in solo practice set-tings: 40 percent of men were in solo

practice or solo pro-fessional corpora-tions vs. 28 percent of women work-ing in one of those practice types. The data indicates that women were more likely than men to be employed by an-other podiatrist (13 percent of women vs. 7 percent of men); were partners in multidisciplinary

ly populated urban areas due to im-provements in transportation, safety, and other factors. A report from the Wall Street Journal entitled “Life in 5G” in The Future of Everything (May 2018) indicates that ultrafast 5G mo-bile internet will create smarter and safer cities. “By combining cloud tech-nology with real-time video and ana-lytics, cities will be able to better man-age everything from electrical grids to traffic patterns,” according to the report. “Intelligent streetlights could direct cars to empty parking spaces. And cities will be able to better track and reduce energy usage, improving air quality and reducing pollution.” Already ride-on-demand ser-vices like Uber, Lyft and Via have improved accessibility for urban resi-dents, even allowing some to eschew their own cars entirely. While wide-spread use of autonomous vehicles may be years away, urban planners are looking for how they can be best used. Some suggest development of underground roadways for these ve-hicles that allow for safe pedestrian foot traffic above ground. Although drone deliveries in some cities have been banned by the Federal Aviation Administration due to poten-tial hazards, companies like Amazon are working with other grounded tech-nologies. For example, Amazon and others are using an artificial intelligence (AI) infrastructure to develop fleets of small pods for pick-up and delivery. The resulting population shifts to the nation’s largest cities may provide new opportunities for practice start-ups and satellite offices.


More New Doctors Surveyed Comparing the respondent pool of this year’s survey to the previous one, a larger percentage of younger doc-tors responded. Thirty-one percent of doctors surveyed were in practice five years or less compared to 23 percent last year. The percentage of doctors in practice more than 20 years dropped

from more than half (51 percent) to 42 percent. As previously mentioned, the fact that a higher percentage of new doctors responded may account for lower income numbers cited throughout this report.

Solo DPM Participation Continues to Drop Respondents in ei ther sel f - employed solo practices or in solo pro-fessional corporations dropped from 39 percent in our previous survey to 36

< 30 30-40 41-50 51-60 61-70 >70

Age Distribution

22%18%

5%

17%

31%

6%

Years in Practice

< 1 1-5 6-10 11-20 21-30 >30

25%

20%17% 17%

10%11%



Distribution by Sex

Male67%

Female33%

No71%

Yes29%

Do You Have Satellite Offices?

In recent years, the changing medicalmarketplace has been moving toward

teams of physicians.


87

PODIATRIC ECONOMICS

ported the lowest percentage of re-spondents with satellites. Population density may have been at play here, as Northeastern doctors may have been able to open another office in fairly close proximity to the original location without cannibalizing their patient base.

Although the number of respon-dents with satellite offices dropped slightly, the number of satellite offices for those who had them was actually higher than last year. For instance, the

percentage of those with only one additional offices dropped from 56 percent to 54 percent, and those with two offices dipped from 21 percent to 18 per-cent. However, the per-centage of those with three offices grew from 8 per-cent to 9 percent, while a whopping 20 percent said that they had four or more satellite offices, up from only 15 percent in our pre-vious survey. Shifts toward partner-ship/group practice and technological advance-ments may have been at

Survey (from page 86) coverage on nights and week-ends and when DPMs go on vacation) may draw in more patients and revenue and help avoid doctor burnout, while consultation among partners might increase the available treatments/ser-

vices and related revenue.

Satellite Offices: More Than One More Common The percent-age of doctors surveyed who had satellite of-fices dropped just one percentage point to 29 percent of respondents. Considering that there

was such a higher percentage of new doctors, this may indicate that respon-dents took over existing multi-location sites or may have banded together

with others to expand their reach into two or more different areas. Northeastern DPMs were the most likely to have one or more satellite offices, while doctors in the West re-

groups (13 percent of women vs. 11 percent of men); or worked in other practice settings, as listed previously (16 percent of women vs. 10 percent of men). The movement away from solo practice is one we have followed since our first survey in 1984, when a whopping 83.5 percent were solo practitioners. In recent years, the changing medical mar-ketplace has been mov-ing toward teams of phy-sicians. The Medicare Ac-cess and CHIP Reauthori-zation Act (MACRA), for example, has altered the way doctors are being re-imbursed under Medicare. The new value-based payment system has driv-en consolidation among physician providers, particularly smaller ones, according to fiercehealthcare.com, which provides news on the health care sector. There are several ways that podia-trists benefit from banding with other doctors. From a directly economic standpoint, partnership/group practic-es enjoy economies of scale, improved purchasing power with vendors, a larger potential fund for marketing efforts, and a better position to nego-tiate managed care contracts. Indirect-ly, there are other benefits: expand-ed office hours (including consistent


Podiatric CollegeGraduates

BUSPM

Other2%

CPMS/DMU

7%

AZ1%

TUSPM18%

OCPM17%

NYCPM21%

CSPM/Merrit

7%

SCPM20%

6%

Type of Practice

Self-employed, Solo

Partnership or Group Practice (All DPMs)

Partnership or Group Practice (Multi-disciplinary)

Other

Employed by Another DPM

Professional Corporation, Solo

Professional Corporation with Other DPMs

12%

24%

12%

9%

28%

8%

7%

No74%

Yes26%

Do You EmployOther DPMs?

Although the number of respondents with satellite offices dropped slightly, the number of satellite offices for those

who had them was actually higher than last year.


88

PODIATRIC ECONOMICS

sponse rate for women to continue to move in an upward direction with future surveys.

Fewer Patients Seen Respondents saw an average of 86.3 patients, down from 88.1 pa-

tients in our previous survey. The data breakdown does not show any significant change in practices with the fewest patients (50 or fewer patients), with 21 percent of those sur-veyed reporting these low numbers. However, there seemed to be a lower percent-age of high-volume practices, with 9 percent reporting that they saw more than 150 pa-tients this year vs. 11 percent reporting the same last year. Cross-tabulating the number of patients per week by years

in practice, the data indicates that patient numbers peaked at the six- to 10-year mark at 99.6 patients per week. Lowest patient numbers were

work here and may increase the prev-alence and number of satellite offices in the future. With more doctors on a team, the ability to work in different locations becomes more economically viable. Technological advancements in health care—such as the expan-sion of telehealth, increasing internet speeds, and the downsizing/portabili-ty of instrumentation—may stimulate a boom in satellites as well. What’s more, the rise of “smart” roadways and autonomous vehicles may make multi-office practices more practical, leading to a larger number of doctors adding an additional location in the future.

Higher Percentage of Women Respondents Survey participation by women jumped from 27 percent to 33 percent this year, the third reported increase in a row. The percentage of women answering the survey became more closely aligned to the male/female

ratio of the profession as a whole. According to data from the American Association of Colleges of Podiatric Medicine, 38.6 percent of those en-rolled in podiatric medical programs during the 2016-2017 year (our survey period) and 40 percent of the 2017

graduating classes were women. Thus the larger percentage of new DPMs surveyed likely were women. As older, predominantly male, podiatrists retire, we expect our re-



0 1- 11- 21- 31- 41- 51- 61- 71- 81- 91- 101- 111- 121- 131- 141- 151- 161- 171- 181- 200+ 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 200

1%2% 2%

4%6%

8%7%

8%

13%

8%

3% 3%4%

1% 1%

Average Number of Patients TreatedPer Week: 88.1

Patients TreatedEach Week

2% 2%

6%7% 7%

4%

Average Number of Patientsper Week by Region

82.085.991.482.9

Northeast South Midwest West

Average Number of Patientsper Week by Practice Location

81.689.785.784.5

Metropolis Large City

SmallCity

Rural

Average Number of Patientsper Week by Years in Practice

<1

1-5

6-10

11-20

21-30

>30 75.5

71.7

94.5

86.7

99.6

93.1


PODIATRIC ECONOMICS

reported by those in practice less than a year (71.7 patients per week) and those in practice more than 30 years (75.5 patients per week). By region, Southern DPMs saw the most patients, av-eraging 91.4 per week. This is interesting, considering that the South came in second in terms of gross income and ranked third in terms of net income. Meanwhile, Western doctors saw the fewest, averaging 82 patients per week, yet ranked first for both gross and net income. (See Gross Income and Net Income sections for further discussion.) Podiatrists in small cities saw the highest average number of patients—89.7 per week—while doctors in rural areas saw the fewest, at 81.6 patients per week. Male DPMs saw considerably more patients per week than women: 90.6 compared to 77.1. This at least partially accounts for the lower income number reported by the women surveyed. Comparing last year’s data to this year’s,

the patient number for women dropped by about two pa-tients per week, while the number seen by men remained about the same. Increasing patient numbers is a challenge covered reg-ularly in Podiatry Management (PM). In fact, this month’s issue offers practical tips in “How to See More Patients Without Working More Hours” on page 69.

Hours Worked Similar Generally, the breakdown of average number of hours worked per week was similar to those reported last year, with the largest concentration of respondents working 36-40 hours per week. The only category that had more than a 1 percentage point change was for those working more than 55 hours per week, which rose from 5 percent last year to 7 percent in our most recent survey. Given the lower average number of patients, this may indicate that doctors spent more time on administrative responsibilities (including hiring/training), marketing, paperwork, and other responsibilities. Comparing number of hours by sex, men worked an average of 37.9 hours per week while women worked 37.5 hours. Given that women saw approximately 15 per-cent fewer patients per week, perhaps they spent more time with each patient or they spent more time on the non-patient-related tasks previously mentioned. A higher percentage of women than men may also have been prac-ticing on a less-than-full-time schedule. For the first time, we cross-tabulated the number of hours worked per week by practice location. Doctors in large cities worked the longest hours, averaging 38.5 hours



Podiatrists in small cities saw the highest average number of patients per week...

while doctors in rural areas saw the fewest.


90

PODIATRIC ECONOMICS

the South: Alabama, Arkansas, Ken-tucky, Louisiana, Mississippi, Oklaho-ma, South Carolina, Tennessee, and Texas. According to the Centers for Disease Control and Prevention, a re-cord high number of Americans—40 percent, or more than 100 million adults—are living with diabetes or prediabetes. “Without significant changes, as many as 30 percent of people with prediabetes will go on to develop Type 2 diabetes,” according to “The State of Obesity” report. Podiatry Management brings DPMs the latest in clinical and prac-tice management tools and techniques covering diabetes-related foot and ankle conditions. Our November/De-cember issue presents this topic in depth with articles from some of the top clinicians in the field. Recent cov-erage included surgical off-loading, TCC, DFU evaluation, and biofilms. Marketing to these patients is covered as well, most recently with “Market-ing Your Practice to the Diabetic Com-munity” in PM’s January 2019 issue. “Smart” technology is emerging as a key player in helping diabetic pa-tients manage and monitor their con-dition. In 2017, the first blood sugar monitor for diabetics that does not need backup finger prick tests was approved by the U.S. Food and Drug Administration. Several Bluetooth- integrated insulin delivery pens came to market during our survey period as well, promising to help patients with dosing and monitoring. Wireless prod-ucts that sync with smartphones can

per week. (Given tha t sma l l - c i t y DPMs saw the most patients, this is a surprise—and may indicate that there were other respon-sibilities or even inefficiencies that large-city DPMs had to contend with each week.) Respondents in rural areas reported the lowest average number of hours worked at 36.8 per week.

Slightly Less Time in Operating Room There was a very slight decrease overall in the per-centage of time each week that re-spondents spent in the operating room. While 23 percent said they spend no time at all in the op-erating room, close to half (46 percent) said that they spend 5 percent to 10 per-cent of their time there. Another one-fifth of those sur-veyed said they spend between 11 per-cent and 20 percent of their time in the operating room weekly.

More Diabetic Patients There was a slight uptick in the percentage of diabetic patients seen in respondents’ practices. Nineteen per-cent of those surveyed said that more than half of their patients were diabet-ic. Last year, 16 percent reported the same percentage of diabetic patients. Mirroring national trends on di-abetes, doctors in the South saw the highest average percentage of diabetic patients of all regions at 36 percent. Midwest doctors reported the lowest at 31.9 percent. According to study by the Nation-al Institutes of Health, 40 percent of U.S. adults in 2017 were obese—a risk

factor for Type 2 diabetes. “The State of Obesity” from the Robert Wood Johnson Foundation uncovered the s tates with t h e h i g h -est diabetes ra tes , wi th West Virgin-ia in the top spot at 15.2 percent of all U.S. adul ts dur ing our survey year. The next nine s tates with the highest diabetes rates ( b e t w e e n 11.9 percent and 14.2 per-cent) were in



Hours Worked Per Week

< 25 26-30 31-35 36-40 41-45 46-50 51-55 >55

5%7%

11%

21%

12%15%15%

13%Pe

rcen

tage

of R

espo

nden

ts

Number of Hours Worked per Week

What Percentage of Your Workweek Do You Spend

in the Operating Room?

46%

8%

23%20%

0%- 5%- 11%- 21%- 31%- 41%- >50 4% 10% 20% 30% 40% 50%

1% 0%2%

Percentage of Workweek in Operating Room

Perc

enta

ge o

f Res

pond

ents

Percentage ofDiabetic Patients

0%- 11%- 21%- 31%- 41%- 51%- 61%- 71%- 81%- 10% 20% 30% 40% 50% 60% 70% 80% 100%

11%

18%

8%5% 4%

2%

17%

26%

9%

Perc

enta

ge o

f Res

pond

ents

Percentage of Diabetic Patients


91

PODIATRIC ECONOMICS

help people to manage their conditions and share their in-formation with doctors and caregivers. New and improved products recently approved for use or are on the horizon include new insulin delivery systems, sensor-transmit-

ter devices with alerts, and a plethora of smartphone apps. According to “Emerging Tech-nologies for Diabetes Care” in the journal Diabetes Technology & Therapeutics, “AI and ma-chine learning are being ap-plied to diabetes management.” For example, according to the article, “AI technology from IBM Watson Health analyzes the relationship between glu-cose levels, food intake, insulin dosages, and other factors, and

provides therapy suggestions.” New technologies in this area are coming to market rap-idly and will be discussed in future survey reports.

Wound Care Up Slightly Respondent data also showed a slight increase in

percent of patients (diabetic and nondiabetic) requir-ing wound care. About two out of three (66 percent) of those surveyed said they referred patients to wound care centers/clinics, which was unchanged from our



No34%

Yes66%

Refer Patientsto Wound CareCenters/Clinics?

Patients RequiringWound Care

(Diabetic/Non-Diabetic)

3%7%

51%

23%

13%

0%- 11%- 21%- 31%- 41%- 51%+10% 20% 30% 40% 50%

Perc

enta

ge o

f Res

pond

ents

3%

Percentage of Patients Requiring Wound Care


92

PODIATRIC ECONOMICS

Little Change in Nursing Home Participation The percentage of doctors who reported working in a nursing home has seesawed in the 20-25 percent

range over the past sev-eral years, edging up 1 percentage point to 23 percent in our most re-cent survey. While demand for nursing homes is ex-pected to increase given the trends in the aging population, there was a drop in the number of operat ional beds throughout the country during our survey pe-

riod, according to the National In-vestment Center for Seniors Hous-ing and Care. Its report entitled, “U.S. Skilled Nursing Occupancy Rate Continues to Slide,” indicates that “the sector has faced pressure over the last few years from policy changes related to reimbursements and a shift to a value-based heath care system.” The report also noted these factors influencing lower occupancy rates: 1) increasingly, patients go to outpatient facilities, rehabilitation centers, or straight home; and 2) assisted living facili-ties have become better able to care for residents who might have pre-viously been cared for in a skilled nursing facility. Research supports the notion that older people increasingly want to age in place. AARP’s “Home and Community Preferences Survey” of adults age 50+ revealed that 77 percent agree with the state-ment, “I’d really like to remain in my community as long as possi-ble,” and that 36 percent planned to modify their homes to enable them to stay as they aged. Techno-logical advancements may enable seniors to remain in their homes as well, with the possibility of robotic companions in the not-too-distant future. The Apple Watch Series 4 is already available, providing a Proactive Health Monitor that in-cludes sensors for fall detection, an emergency SOS system, and heart rate monitoring that lets the wear-

previous report. Regionally, of those who referred patients to these centers, Northeast DPMs were most likely to do so, followed (in per-centage order) by respondents in the South, the Midwest, and the West. Giving the rising prevalence of chronic wounds and diabetic foot ulcers worldwide, we expect this aspect of podiatric practice to grow over the next several years. And greater interest from pharmaceu-tical companies to develop new treatments will likely follow, es-pecially as some major drug pat-ents in other clinical areas expire. In fact, a report by Transparen-cy Market Research titled “Wound Healing Market—Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2017-2025”

suggests that the increasing patient pool for chronic wounds is like-ly to spur the demand for wound healing products through 2025. Doctors can keep abreast of new wound treatments and technol-ogies in nearly every issue of PM but most especially the August issue, which covers this area in depth. PM also publishes new concepts and studies in the field in its Clinical Innova-tions section.

Participation in theMedicare Diabetic Shoe Program More than half (53 percent) of those surveyed partici-pated in the Medicare Diabetic Shoe Program. This rate has remained fairly constant (±5 percent) over the past eight years on both the Annual Survey and podiatrym.com

Quick Polls. It reached as high as 71 percent in the survey covering 2004 and hovered around the 70 percent mark for a few years after before dropping to current levels. Increased scrutiny by carriers, fear of audits, and t he pape rwo rk burden have been cited by those who did not participate. PM columnist Paul Kesselman, DPM, regu-larly updates readers on changes related to the Medicare Diabetic Shoe Program. He anticipates a much “kinder” au-diting approach and a lower percentage of audits (noting a significant drop in 2018 vs. prior to 2018). “For those readers who may have discontinued supplying therapeutic shoes, perhaps this is

the time to consider re-instituting a therapeutic shoe program in their practice,” he wrote in “What’s New in 2019 for DME (and Medical) Pro-

viders?” in the January 2019 issue. Some shoe companies have devel-oped programs to make the decision to partic-ipate easier, providing complimentary assis-tance and forms to in-terested practitioners. Besides providing a service to Medicare pa-t ients and providing supplemental income, participation in the pro-gram may also serve as a practice builder through referrals and

from supplying these patients with other devices, such as toe fillers and AFOs. With the aging population and more active elderly patient base, we anticipate no shortage of patients for this program.



More than half (53 percent) of thosesurveyed participated in the

Medicare Diabetic Shoe Program.

No47%

Yes53%

Do You Participate in Medicare

Diabetic Shoe Program?

Work inNursing Home

Yes23%

No77%

accounted for 10 percent or less of their income. A factor contributing to this drop may be the larger percentage of new doctors who may have lacked the experience or credentials required (such as Board Certification) to join some plans. Perhaps DPMs of all ages have become better armed with the financial savvy to conduct cost-benefit ratios on contracts be-fore they signed. Doctors have rec-ognized the potential and hidden costs when 26 percent of their pa-tients accounted for just 23 percent of their income. In an analysis of MCO partici-pation by number of years in prac-tice, the data indicates that older practitioners relied on MCOs for a higher percentage of their income

than new practi-tioners. In fact, the percentage of income from MCOs increased in every subse-quent years-in-practice category from year one onward, peaking at 33 percent of income for doc-tors in practice more than 30 years. N o r t h e a s t -ern DPMs by far had the highest pe rcen tage o f participation in all MCO types c o m p a r e d t o


93

PODIATRIC ECONOMICS

er know if it detects something of concern. Apple, Google, Amazon, Microsoft and others are focus-ing on digital health, and we will watch for devices that impact the podiatrist’s elderly patients over the next few years.

Fewer DPMs Join MCO Panels and ACOs A lower percentage of doc-tors participated in all three types of MCO panels, comparing last year’s to this year’s results. Re-spondents who were on preferred provider organization (PPO) pan-els dropped from 67 percent to 64 percent. The per-centage of doctors who jo ined HMO pane l s dipped from 54 percent to 52 percent. Those reporting their involve-ment with independent practice associations (IPAs) dropped from 30 percent to 28 per-cent. Doctors surveyed participated in a total of 4.3 programs, down from 4.5 panels in our previous survey. Last year, 29 percent of respondents said they participated in more than five MCO programs. This

year, that response dropped to 25 percent. Not surprisingly, the average

number of MCO pa-tients seen by respon-dents also fell, account-ing for 26 percent of pa-tients seen vs. 28 per-cent last year. While 19 percent of respondents said that the majority of their patients were from MCOs last year, only 16 percent reported the same this year. Slightly less income was earned from MCO patients: 23 percent this

year vs. 24 percent in our previous survey. In fact, 45 percent of doc-tors surveyed said that MCO patients



MANAGED CARE GROUP PARTICIPATION

HMO

Yes52%

No48% No

72%

Yes28%

IPA

No36%

Yes64%

PPO

No74%

Yes26%

Patients in Managed Care

Programs

11%

Managed Care by Region

12%

6%

18%

23%

9%

6%

9%

13%

5%

Northeast South Midwest West

HMO IPA PPO

12%

20%


94

PODIATRIC ECONOMICS

APMA banded together with po-diatric colleges and other organi-zations to combat this threat. The APMA was part of the team that forged the passage of the VA Pro-vider Equity Act as part of the VA Mission Act—with podiatrists in the VA now defined as physicians and surgeons in the Department of Veterans Affairs. The APMA is also working to increase the number of qualified applicants for podiatric medical schools.

Lower Percentage of Board Certified Respondents The percentage of Board Certi-fied DPMs dropped from 75 percent last year to 68 percent in our most recent survey. While Board Certifica-tion is an important criteria for doc-tors to obtain spots on MCO panels,

some of our respondents may not have had the time or incli-nation, given the demands of startup and their need to focus on practice growth. Board Certification pro-vides a credential for which prospec t ive pa t ients may search, especially if they are looking for a podiatrist in a particular area of specializa-tion. Areas covered by certi-fying boards include primary podiatric medicine, podiatric

orthopedics, lower extremity med-icine and surgery, rearfoot and re-constructive surgery, prevention

and treatment of dia-betic foot wounds, and diabetic footwear. We may see an uptick in Board Certification with the recent offering of Board Certification in minimally invasive foot and ankle surgery by the American Board of Multiple Specialties in Podiatry.

Interest in DegreeChange Drops Slightly A smaller percent-

age of doctors expressed interest in obtaining MD or DO degrees. In our most recent survey, 60 percent were in favor of the change vs. 62

the other three regions. Southern doctors were second in terms of per-centage who participat-ed in all types. Participation in ac-countable care organi-zations (ACOs) by re-spondents dropped 2 percent to 27 percent o f ou r mos t r e c en t respondents.

Percentage ofUninsured Increased From 2016 to 2017, the percentage of nonel-derly individuals who lacked health insurance rose by nearly 700,000, to 27.4 million people, reversing some of the coverage gains achieved under the Affordable Care Act, according to data by the Kaiser Family Foundation. The states with the highest percentage of uninsured were in the South and West, and Hispanics and blacks had significantly high-er uninsured rates (19 percent and 11 percent, respectively) than whites and Asians (each at 7 percent). As we anticipated in our last report, the predicted cuts to Obamacare spearhead-ed by the Trump administration did indeed result in a reversal of the downward movement that started in 2011.

APMA Membership: Stats and Impact The percentage of doctors sur-veyed who were members of the American Podiatric Medical Associ-ation (APMA) dropped from 78 per-cent last year to 76 percent in our most recent survey. APMA membership offers many benefits for both new and seasoned DPMs. The organization provides practice management, reimburse-ment and educational resources, plus public health information that doctors can use in community out-reach and education. Tools help doctors with coding, reimbursement, compliance, state laws and regula-tions, and hospital privileges and

credentialing. In addition, the orga-nization provides a “Monday Min-

ute” to keep members abreast of the week’s most important topics and has an active Twit-ter feed that provides tips and information for consumers. The “Find a Podiatr ist” sect ion allows prospective pa-tients to search by lo-cat ion for members’ practices. T h e Y o u n g P h y -sicians Program, for DPMs who graduat -ed within the past 10 years, of fers a myr-

iad of benefits, including a ca-reer center for finding available jobs and practices, a coding and

reimbursements module, and its own publication and event. The Young Physicians Transitions se-ries provides resourc-es “from student debt management to coding” and “serves as a mem-ber-only resource cre-ated to meet the unique needs of young physi-cians through each year of transition from resi-dency to practitioner,” according to apma.org. Advocacy on Cap-itol Hill is perhaps the key benefit of APMA membership. The orga-nization has been in-strumental in several recent initia-tives. When the Centers for Medi-care & Medicaid Services proposed to segregate podiatry by creating separate E/M codes for DPMs, the



Are You a Participant in an

Accountable Care

Organization?

No73%

Yes27%

Membership in APMA

Yes76%

No24% No

32%Yes

68%

Board Certified

In Favor ofPodiatrists

Obtaining MD or DO Degrees

Yes60%

No40%


PODIATRIC ECONOMICS

percent last year. Undoubtedly, the larger percentage of new doctors may have impacted this shift, especial-ly with inexperienced doctors who may have not yet faced many limitations or roadblocks because of their DPM credential. The pros and cons of a degree change continue to be discussed online in PM News and in the Letters section of this magazine.

Back and Respiratory Problems: Starting Younger? A slightly smaller per-centage of doctors surveyed said they experienced ei-ther back or respiratory problems compared to our previous report. Forty-one percent had back problems (down from 42 percent), while 8 percent had respi-ratory issues (down from 9 percent). These numbers seem high given the high percentage of new DPMs surveyed compared to last year and the expectation that younger doctors would not ye t be exper ienc ing these issues. With a growing num-ber of podiatrists perform-ing both in-office and hos-pital-based surgical proce-dures, the risk for pain and/or injury among DPMs may be increasing. Perhaps com-pared to their predecessors, new clinicians are perform-

ing more surgery, exposing them to these problems earlier in their careers. Several international studies cite this problem, indicating that back pain is preva-lent among surgeons of all specialties. Where and when pos-sible, equipment vendors continue to respond with tweaks in features to elimi-nate potential injury. Chair vendors, for example, have addressed back problems by designing examination chairs with ease of patient ingress and egress and mul-tiple controls for the most comfortable, ergonomic po-sitioning for both doctor and patient.



Do YouGrind Nails?

No30%

Yes70%

Yes8%

Do You Have Respiratory Problems?

No92%

No59%

Yes41%

Do YouHave Back Problems?


98

PODIATRIC ECONOMICS

Medicare Participation and Audits The percentage of respondents who accepted Medicare seesawed back to 91 percent in our most recent

survey from 92 percent last year and 91 percent the year before. The percentage of those who were audited by Medicare dropped

The fees listed were down overall by 2 percent vs. our previous sur-vey, primarily due to reductions in higher-cost procedures, such as bun-ion (radical), hammertoe, and or-thotics. Meanwhile, doctors surveyed charged between 1 percent and 4 per-cent more for the three service lev-els listed (initial exam, initial exam (Level 3), and subsequent visit) as well as for ingrown (partial). They charged 6 percent more for x-rays and injections. Note that the fees list-ed in the accompanying charts were the average amounts doctors charged and were not necessarily what they were paid.

A review of the U.S. Bureau of Labor Statistics (BLS) Consumer Price Index for our period showed a 1.8 percent drop in the cost for phy-s ic ians’ services nationwide, mir-roring our survey results. In our survey’s c o m m e n t s s e c -tion, a number of employed DPMs said that they had no cont ro l over fee sett ing. Oth-ers remarked that charges listed were ra re ly pa id and that MCO-contract-ed amounts were a fraction of those listed here. Sev-eral newer practitioners said they were still wrestling with fee setting and were looking for resources for assistance.



FEES, MEDICARE& AUDITS

FEES

Orthoses(Including Casting,

Fabrication and Dispensing)(L3000x2)

2017 2018

$451.94 $443.19-2%

X-Rays(1 Plate) 2 Views

(73620)

$66.92 $70.72+6%

2017 2018

2017 2018

Initial Exam(99203)

$116.43 $118.88+2%

Subsequent Visit(99212)

$93.72 $94.50

2017 2018

+1%+4%

Initial Exam (Level 3)

$157.82 $164.51

2017 2018

2017 2018

Matrixectomy,Partial Permanent

(11750)

$317.49$312.07+2%

No9%

Yes91%

Do You AcceptMedicare

Assignment?

No97%

Yes3%

Have YouBeen Audited by

Medicare?


PODIATRIC ECONOMICS

from 5 percent last year to 3 percent in our most recent survey. Despite this drop, the amounts required to pay back were generally higher. Fifteen percent of those audited paid back more than $10,000; that was up from 10 percent of those audited in our previous survey. Twenty-nine percent were required to pay back $1,001



FEES

Injection, Small Joint/Bursa(20600)

$105.86 $112.39

+6%

2017 2018

Hammertoe Surgery (28285)

2017 2018

$825.67 $790.43

-4%

2017 2018

Bunionectomy with Osteotomy (28296)

$1,438.84 -3%$1,402.55


100

PODIATRIC ECONOMICS

combined, the highest median gross income was reported in the West at $206,500 (a less than 1 percent drop

from last year). Given that the West saw the fewest number of patients per week, perhaps Western practi-tioners collected more per patient. (Their low participation in MCOs—which may pay lower-than-aver-age fees—bears this out as well.) Next by dollar amount was the South with a median gross income of $197,000 (down 8 percent), then the North Central region at $191,500 (down 5 percent) and the East at $182,750 (down 7 percent).

While the BLS reported an in-flation rate in 2017 of 2.1 percent, doctors surveyed spent 4 percent less overall for the expenses listed below. Besides belt-tightening in certain ex-pense categories, some practitioners may have started to purchase medical supplies and DMEs from group pur-

chasing organizations at significant discounts—a boon especially for prac-titioners who sold over-the-counter

(OTC) items in-office. Another po-tential cost-saving tactic might have been the use of professional employ-er organizations (PEOs), which han-dle a combination of services such as human resources (payroll, adminis-tering benefits, tax reporting), gov-ernment compliance assistance, and more. By taking these tasks out of the office, PEOs may boost practice pro-ductivity by freeing up time for doctor and staff to see more patients. Given the challenges doctors face to shore up net income, we expect more services to enter the market-place whose mission is to help doc-tors cut costs. We also anticipate an increase in suppliers providing free or low-cost services to make practices more efficient—a win-win for both the companies and the practitioners. Here is an analysis of respon-dents’ major practice expenditures.

Gross salary payments averaged $96,962, a drop of 2 percent from our previous

to $10,000 (up from 13 percent). The remaining 57 percent were required to pay back $1,000 or less. Medicare fraud continues to be a major issue facing all of medicine. According to the U.S. Department of Justice, the Federal Government won or negotiated over $2.4 billion in health care fraud judgments and settlements for the fiscal year ending July 1, 2017.

Solo DPMs surveyed reported a 6 percent decrease in median gross in-come compared to our previous sur-vey, dropping to $242,000. Dragging down this amount may have been the high percentage of solo doctors with revenues under $100,000: 17 percent in our most recent survey vs. 12 percent last year. This seems to be another impact of the larger new-doctor respondent pool. Gross income for partnership/group practitioners (the individu-al doctor’s share of total revenue) dropped 7 percent to $193,000. Note that this figure is considerably lower than solo practitioners because part-nership/group DPMs generally split expenses among all doctors. Regionally, for all practice types Continued on page 102


Besides belt-tightening...some practitioners may have started to purchase medical supplies and DMEs from

group purchasing organizations at significant discounts.

Income in <100 100- 126- 151- 176- 201- 251- 301- 351- 401- 451- 501- 601- >700

8%

17%

6%

4%3%

8%8% 8%6%6%

7%

4%

9%

Median Gross Income:$242,000

4%

Gross Income, Solo Practitioner

Thousands 125 150 175 200 250 300 350 400 450 500 600 700

GROSSINCOME

EXPENSES& TRENDS


102

PODIATRIC ECONOMICS

survey. This decrease is worthy of note considering the tightening job market during our survey period, the trend toward job mobility (which his-torically results in wage hikes), and rising minimum wage requirements. In fact, according to the BLS, the mean annual wage for medical as-sistants rose 2.2 percent to $33,580 during our survey period. One factor that may account for a lower number here includes the high-er percentage of respondents in new practices, which generally have had smaller staffs in their lean start-up phase. Some doctors may have pro-vided new or enhanced benefits in lieu of higher salaries, such as flexible work schedules, additional vacation time, and performance bonuses. Emerging virtual assistant tech-nology may play a role in the office of the future, impacting staffing costs especially for larger practices. Already Google Assistant, Amazon’s Alexa, and Apple’s Siri can handle simple tasks in the consumer’s household. Over the next decade, we anticipate AI to take the form of robots for both personal and office use. We foresee repetitive office tasks being managed by staff but performed by smart devic-es. AI could assist doctors in diagnosis and treatment. Data handling, priva-cy, security, and trust are among the issues facing purveyors of these tech-nologies, especially as they enter med-ical practices. According to “Intelli-gent Machines Will Be Our Teachers” in the previously cited The Future of Everything, AI already has capabilities with promise for practice use, such as taking over “many rote cognitive tasks that require human judgment, strate-gic planning, or creativity. Whether browsing millions of legal documents or scrutinizing CT scans, machines can now do much expert work faster and more precisely than their human creators.”

Respondents spent $24,595 on office space, down 7 percent from our previous survey. This reflects the presumably smaller space used by new DPMs as well as the fact that our larger percentage of



$190,200

$225,600

$231,000

$226,000

$174,500

$165,292

$188,500

$208,000

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

$228,450

$209,647

$233,000

$171,336

$178,300

$232,850

$203,227

$195,200

$268,950

Cumulative Gross Income, Solo Practitioner

$223,270

$225,500

$227,750

$225,500

$223,000

$225,000

$247,725

Change in Gross Income:2017 to 2018:

-6%

$251,000

$243,500

$232,500

$227,500

$256,000

$258,500

$242,000

Among our respondents, 69 per-cent said that they incorporated digi-tal x-ray technology in their practices, up from 65 percent in our previous survey. Another 20 percent indicated that they planned to incorporate digital x-rays within the next two years. Inter-

estingly, just 43 percent of doctors sur-veyed used digital x-rays when we first added this question eight years ago. Other clinical devices in which doctors may be investing include those that detect peripheral artery disease (PAD), laser therapy systems, ultra-sound-guided tenotomy and fascioto-my equipment, shock wave therapeu-tic devices, and hyperspectral imaging equipment. While telephone service costs are discussed in the “Utilities” section below, new mobile device expenses for doctor and staff may have been in-cluded here—and these costs reached new heights during our survey period.

Apple’s iPhone X pushed prices up to nearly $1,000 or more, while phones by Samsung, Google, and LG were priced at $800+. Since our survey period, demand has softened some-what for expensive smartphones, so developers are banking on innovative technological breakthroughs to boost future sales. One technology being explored is a smartphone with a big display that folds up like a book. This type of device could be useful particu-larly in medical practices and for doc-tors with satellite offices, as these may combine the features of a smartphone and tablet while improving portability. In the future, robotic technology as previously described will likely add to equipment (and maintenance) costs. Be-sides providing staffing benefits, robotic technology may be used clinically as well, as discussed in the journal Nature. In “Small-scale soft-bodied robot with multimodal locomotion,” researchers described how small robots made of sil-icone rubber and embedded with mag-netic particles that “can non-invasively access confined, enclosed spaces may enable applications...in health care, such as targeted drug delivery and minimally invasive surgery.” Experts predict this technology may be only seven or eight years away.

The cost for com-puter service/maintenance and the in-ternet was $3,487, down 11 percent vs. our previous survey. In some markets, competition among internet providers has in-


104

PODIATRIC ECONOMICS

partnership/group respondents split this cost. The national vacancy rate for medical office buildings fell to an all-time low in 2017, according to “U.S. Research Report: 2018 Healthcare Marketplace” by Colliers Internation-al. The report indicates that while medical office rents increased an av-erage of just 1 percent overall, some markets with low vacancy rates saw much higher rent increases. Markets that saw the strongest rent growth were Boston (+17.1 percent), San Diego (+6 percent), and Seattle (+5.7 percent). The report further indicates that five states that appear on top of our survey—California, Florida, New York, Pennsylvania and Texas—”dominated the construc-tion pipeline with a combined total of 63.8 million square feet in current and planned projects.” The growing inventory of available medical office space in those states is good news for podiatrists looking to start or move a practice, open a satellite office, or even negotiate a new lease.

Spending on equipment for the prac-tice rose 3 percent to $4,474.

While new practices likely report-ed high expenses in this category as they equip their offices for the first time, new technology may have at-tracted seasoned DPMs to new tech-nologies and upgrades. The Internal Revenue Service Section 179 expens-ing (for buying, financing, or leasing qualifying equipment, vehicles, and/or software), allowing full deductibil-ity up to $510,000 in 2017, may have been a deciding factor in new equip-ment purchases. We may see an up-tick in equipment purchases in the next few surveys if we learn of any impending tax law changes that elimi-nate or reduce these deductions.



YOUR OVERHEAD EXPENSES

2017 2018

Gross SalaryPayments

$99,251 $96,962-2%

$24,595$26,464

Office Space-7%

2017 2018

Among our respondents, 69 percent said that they incorporated digital x-ray technology in their practices,

up from 65 percent in our previous survey.


105

PODIATRIC ECONOMICS

order to take advantage of equipment and communication capabilities. In some municipalities, local govern-ments have helped set up broadband networks. According to some reports, this has led to incumbent providers upgrading the service in these areas. Ultra-fast 5G mobile internet is already in some major U.S. cities and is anticipated to become available na-tionwide by 2020, according to the previously cited “Life in 5G”. “5G has the potential to dramatically re-shape our lives, from leisure pursuits to emergency medical treatments,” according to the report. Device con-nectivity may impact not only com-puter-based functions but also such practice-related benefits as worldwide collaboration and consultation and communication between pieces of equipment in the office. Meanwhile, the 10G initiative—ca-ble’s ramp up to 10 gigabits-per-sec-ond speeds—is in the works by U.S.

creased, perhaps providing lower-cost services for some practices. With lower revenue, some doctors may have cur-tailed spending on new computer

equipment during 2017. This may be one of the first years for seamless in-tegration of electronic health records (EHR), with previous costs represent-ing the changeover from paper records. In addition, improved remote comput-er access may have reduced the cost of maintenance among those surveyed, with technician travel no longer need-ed for every problem. Undoubtedly, this category in-

cluded EHR updates/upgrades and an investment in cybersecurity. Since patient data is a prime target of hack-ers, and opportunists are becoming more sophisticated in their attacks, we foresee this area becoming a larger

cost for practitioners over time. “The value to thieves of a health care data record is 50 times that of a credit card record,” according to “Your Practice Can and Should Be Cyber Secure” in PM’s October 2018 issue. Increasing data speed has been the driver of many new technologies, with businesses moving toward high-speed fiber and cable and away from slower providers such as satellite in

Since patient data is a prime target of hackers, and opportunists are becoming more sophisticated...we

foresee this area becoming a larger cost for practitioners.



ty/gas, water, telephone services, and the like were $4,824, or 15 percent lower than respondents paid last year. Our percentage drop may reflect the larger percentage of new doctors, who may have had smaller spaces with reduced energy and heating/cooling requirements. Our larger segment of partnership/group DPMs was certainly a factor, as these doctors generally split overhead costs among all partners. The increased use of smart or programma-ble thermostats in some offices may have reduced energy bills as well, as many utilities have been offering re-bates with purchase of these devices. This significant drop is surprising considering that there were increases nationally in the cost for some utilities. According to the BLS, for example, the cost for electricity rose 2.6 percent between 2016 and 2017, while gas ser-vice increased 4.7 percent. One aspect of energy consump-tion that may impact rates moving forward is the movement away from coal in the U.S. The Energy Informa-tion Administration reported that coal consumption has dropped off in re-cent years and is being replaced by carbon-free power. The conversion may result in some short-term price in-creases but may ultimately reduce con-sumer costs, as indicated in “Utilities Speed Up Their Retreat From Coal” by The Wall Street Journal. The drop in wind, solar and natural gas costs—along with the environmental issues with coal-fired powered plants—has accelerated this shift, despite the Trump administration’s attempt to re-vive the coal industry. What does this all mean to the practice owner? Per-haps some higher rates in the near term with a lowering of rates as utili-ties pay off their conversion costs and technologies improve. Water costs nationally varied during our survey year, depending upon practice location. For example, the price for water service in some arid California communities topped $500 per month due to the costs and logis-tics of buying their water from outside sources. Meanwhile, some Long Is-land, New York, areas reported rates in the $50 range due to their abun-dance of ground water. Looking ahead, pending mergers


106

PODIATRIC ECONOMICS

cable operators including Comcast, Charter, Cox, Mediacom, and Midco.


Survey (from page 105) Its impact on practice reportedly will not likely be felt, however, for another two to three years. Payments for electrici-


2017 2018

Bio/PathologyLaboratory Expenses

$395

$694 +76%

2017 2018

Laboratory Expenses(Orthotic)

$8,753$7,607

-13%

2017 2018

$3,196

$2,422

Pension Contributionfor Staff

+32%

2017 2018

Utilities

$5,690$4,824

-15%

$4,358 $4,474+3%

Fixed EquipmentExpenses

2017 2018

Educational Expenses

-1%$2,482

2017 2018

$2,463

2017 2018

$11,422

Pension Contributionfor Self

$10,945

+4%

2017 2018

$19,895

Student LoanRepayment

-14%

$17,031


108

PODIATRIC ECONOMICS

continuing education. By attending meetings and conferences, doctors can participate live in group discussions and hands-on clinics. Topics range from clinical to practice management, including such areas as minimally invasive surgery, regenerative medi-cine, limb salvage and preservation, wound treatments, and risk manage-

ment. Besides attending off-site ven-ues, doctors can take advantage of webinars, website-based training, and mobile apps. Some associations offer discounted CME for their members. Podiatry Management’s continuing medical education series is one exam-ple of a low-cost way to attain CME. Staff education and certification may have been included as part of doctors’ educational expenses. While

like the one between Connecticut Water Service, Inc., and SJW Group could result in higher rates. However, large, publicly traded utilities may be in a better position to handle aging water systems than municipalities, which own most water utilities in the U.S. The aging water infrastructure, especially those in the largest and old-est U.S. cities, may also be aided by new technologies. For instance, we may see 5G-connected sensors that can detect and fix leaks before breaks occur, reducing major costs associated with water main breaks. Competition among telephone ser-vice providers may have led to lower bills for both landline and mobile phone service, with some carriers of-fering significant savings for contract signups. Lower-cost voice-over inter-net Protocol phone systems have ex-panded in use for businesses as well. “VoIP is the foundation of today’s business phone providers, and cloud delivery means you get access to easy deployment and the richest set of...features ever,” according to a review

of the latest providers from PC Maga-zine (pcmag.com).

Educa-tional expenses dropped slightly (by 1 percent) to $2,463. We anticipated a bigger drop considering a large portion of our respondent pool just graduated and are busy starting practices. It is

likely that many sought Board Certi-fication or perhaps pursued education on topics related to practice startup. Ac-cording to the Accreditation Council for Continuing Medical Education, the total number of continuing medical educa-tion (CME) hours increased by 4 per-cent during our survey period to more than 1 million hours of instruction for all health care professionals combined. CME choices for podiatrists abound for both in-office and off-site Continued on page 109



2017 2018 2017 2018 2017 2018

2017 2018

$5,814$5,275

-9%

Office Supplies(Non-Medical)

Cleaning & OfficeMaintenance

$1,876 $1,921+2%

Professional Dues+3%$2,191$2,134

2017 2018

Disposable MedicalSupplies

$10,325-1%

$10,383

Non-MalpracticeInsurance

$2,653 $2,417

-9%

$3,252$3,833

+18%

Legal & AccountingExpenses

2017 2018

Besides attending off-site venues,doctors can take advantage of webinars,website-based training, and mobile apps.


109

PODIATRIC ECONOMICS

Doctors surveyed spent 3 percent more on association dues, averaging $2,191 in our latest report. This change might be related to our larger segment of new DPMs—who may not have had time to join organi-zations yet—and the lower percentage of APMA members. As previously mentioned, association memberships can provide a plethora of benefits. The benefits of the APMA have already been discussed. Regional groups focus on issues facing specific states and provide access to up-to-the-minute changes in policies or regulations. Associations also provide access to like-minded clinicians in their particular area of interest, be it minimally invasive foot and ankle surgery, wound healing, lower extremity surgery, foot and ankle dermatology, sports medicine, and other areas. Both the American Academy of Podiatric Practice Management and the Institute for Podiatric Excellence & Development focus primarily on practice management and share tips and strategies among members.

The cost for professional mal-practice insurance was $9,705, an increase of 3 percent. According to a report from Forbes entitled “Why Doctor Malpractice Premiums Stopped Rising,” which includes data from Medical Liability Monitor, there was a combination of factors that kept premiums from rising dramatically. These included a lower claims frequency, medical liability reforms, well-capitalized carriers, and a shift to outpatient care. Factors in the future that could impact rates include the increasing use of social networking and smartphones; the participation in ACOs, which may increase a practitioner’s malpractice exposure; increased use of digital technology, including telemedicine and robotics; and the opioid crisis, which has already taken its toll on average life expectancies and is impacting liability exposure for all medical specialties.

The cost for insurance related to the practice, such as general liability, fire, theft, flood, practice-related automobile, and business interrup-tion insurance dropped 9 percent to $2,417. According to the Insurance Information Institute, prop-erty/casualty premiums increased 4.6 percent between 2016 and 2017. We assume that our respondents’ lower average was due to the lower percentage of new doctors with smaller offices, and perhaps the more efficient use of space (see “Office Supplies (Non-Medical)” below). The larger percentage of partnership/group respondents paid only a fraction of these insurance premiums. In addition, some doctors in all practice settings may have re-evaluated their existing insurance policies, switched carriers, removed unnecessary coverages and/or increased deductibles. Factors that may impact this cost in future surveys in-clude increased competition in the insurance marketplace, as some carriers that previously focused solely on consum-er underwriting start focusing on business policies. New competitors may mean lower premiums for businesses. On the other hand, 2017 was an active and expensive year for insurers due to major hurricanes (see “Other Expenses” below), and insurance companies may have to boost pre-miums to recoup losses. In addition, increased data threats

DPMs may typically budget for staff training annually, the larger percentage of doctors starting new practices in our most recent survey may have needed to set aside high-er-than-average funds for training inexperienced staff.



1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

$5,829

$8,948

$9,834

$7,683

$7,990

$8,673

$9,672

$9,280

$10,013

$8,402

$9,902

$10,686

$10,998

$9,009

$7,697

$9,107

$9,789

$8,016

$8,833

$9,478

$9,387

$9,705

$7,439

Change in Professional Liability2017 to 2018: +3%

Professional Liability

earlier in this report, could have also impacted this cost. Doctors in new practices may have stocked their prac-tice inventory of disposable medical supplies for the first time. The cost for disposable medical supplies was relatively flat, down 1 percent to $10,325. Fewer patients were seen overall, which may have kept these practice costs in check de-spite price increases. Doctors may have also used the previously men-tioned group purchasing organiza-tions for these items, or may have purchased them through member-ship-based warehouse stores, such as Sam’s Club, Costco, and BJ’s Whole-sale Club at a significant discount from standard retail prices.

Doctors surveyed spent $7,607 on orthotic lab expenses, down 13 percent from our previous survey. Doctors surveyed sent out 3.1 pairs of true custom orthotics to an outside lab each week, down from 3.5 pairs in our previous survey. Respondents dispensed 3.4 pairs of prefab orthotics weekly, down from 3.8 pairs. Again, we point to the new prac-tices and lower patient numbers as impacting the number of pairs and amount spent here. Competition from companies selling custom orthotics, such as those advertised by Costco and other emerging competitors (see “How Should We React When We Find Out Costco Is Selling Custom Or-thotics” in the Letters section of PM’s September 2018 issue), may impact future survey numbers. In keeping with the movement to add new technology to podiatric prac-tices, the percentage of doctors who used foot measuring technology rose from 19 percent last year to 25 percent in our most recent survey. An addi-tional 8 percent said that they were considering adding this technology within the next 12 months.


110

PODIATRIC ECONOMICS

Survey (from page 109) With our higher percentage of new-doctor respondents, we anticipat-ed a jump in average cost for student loan repayments. However, DPMs surveyed reported a 14 percent drop in this expense, averaging $17,031. Interest rates edged up during the year covered by our most recent sur-vey after hitting a 10-year low. DPMs may have responded to the higher rates (and the threat of even higher ones) by consolidating their loans at a fixed rate and perhaps extending payback timelines to lower month-ly premiums. This tactic may have made cash available for new doctors to get their practices off the ground. In addition, some doctors may have taken advantage of the Federal gov-

ernment’s Public Service Loan For-giveness program, which offers signif-icant debt relief for doctors working in nonprofit or government institutions. Medical school data sheds some light on the student loan crisis faced by general medicine. According to “What Medical Schools Are Doing to Reduce Student Debt” in U.S. News and World Report, med school grad-uates who borrowed finished their degrees with $170,000 (public institu-tions) and $180,000 (private schools), on average, in student loans. Simi-lar burdens faced by today’s podiatry school graduates are certainly one rea-son for the recruitment crisis that the profession now faces. We expect doctors to report bigger payments over the next one to three years or more given the rate interest increases we have seen over the past 18 months.

Bio/pathology lab expenses rose from $395 to $694—a 76 percent increase that may be a correction after the large drop reported in our previous survey. The higher percentage of wound care patients, as mentioned

may push some to increase their cy-bersecurity protection, especially as their practices grow.

The average cost for lawyers and accountants among respondents sur-veyed grew 18 percent vs. last year to $3,833. At least some of this in-crease can be attributed to the higher percentage of new DPMs, who like-ly needed legal help with business formation, employee contracts, office leases, mortgages, equipment and supplier leases/contracts, and other needs related to a new job or practice. We expect accounting costs to edge up in future surveys, given the In-ternal Revenue Service’s more stream-lined approach to audits and the tax law changes that took effect in the year following our latest survey. PM often covers tax issues from a personal and/or professional standpoint, including the article “Who’s Afraid of an IRS Audit?” in this issue on page 77.

Doc-tors contributed more for both their personal and staff pensions after re-porting a dip in our previous survey. For themselves, doctors contributed 4 percent more than our previous survey into their pensions, averaging $11,422 per respondent. Respondents boosted contributions to staff by 32 percent, jumping to $3,196 in our lat-est report. Podiatry was “on trend” with its increase in retirement contributions. According to a Bankrate poll of em-ployed Americans, 23 percent boosted retirement savings in 2017—the third consecutive year in a row that they in-creased savings. Other factors that may have influenced doctors to increase pensions include: the positive econom-ic outlook; potential tax law changes that might make future contributions less tax friendly; and, for staff, the tight employment market in which DPMs were competing for top-notch staff. While both doctor and staff pen-sions were up, these contributions were still below our pre-Recession high of $12,500 for doctors and $4,745 for staff.


In keeping with the movement to add new technology to podiatric practices, the percentage of doctors who used foot measuring technology rose from 19 percent to 25 percent.


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PODIATRIC ECONOMICS


The top preferred method of foot measurement for prescribing orthot-ics was plaster, used by 41 percent of those surveyed, down from 47 percent last year. Foam was the next most widely used method at 23 percent of respondents, down from 25 percent. The big increase was in the percentage of DPMs who used digital (optical or laser) devices for foot measurement: 21 percent vs. 16 percent when com-paring our most recent data to last year’s. Eleven percent used STS Slip-per Sock (up from 9 percent), and 5 percent used pressure technology (up from 3 percent). Doctors surveyed prescribed four gauntlet AFOs per month, the most of the AFO types listed. Functional hinged AFOs (Richie type) came in second at 2.5 per month, followed by solid AFOs (2.4 per month) and dorsi-flex assist AFOs (two per month). When performing off-loading pro-cedures, doctors surveyed most often used a post-op shoe/boot/walker (75 percent). TCC was used by 14 percent, while 11 percent modified the patient’s existing footwear. Utilization of 3D printing is becom-ing more widespread internationally as device and material costs drop, soft-

ware improves and more markets for its use are identified. Already we see great promise in the prosthetic space, and we anticipate expanded use for both orthotics and AFOs. This may mean greater competition (see Costco above, which uses this technology) but also may drive down costs and increase turnaround times for doctors prescribing these devices. New Balance was the top brand of athletic footwear prescribed or recom-mended by respondents for the seventh year in a row. Forty-six percent of those surveyed said they recommend it most (up from 44 percent), followed by Asics (up 1 percent to 24 percent) and Brooks

(unchanged at 17 percent). While there have been some sig-nificant technological changes in foot-wear over the past decade, sensor technology will provide “shoes that diagnose,” according to Andrew Carle, of the Department of Health Admin-istration and Policy at George Mason University. In an AARP Bulletin report entitled “Clothes That Heal,” Carle predicted that in the future, ‘smart shoes’ will use sensors to track body weight, heart rate, blood pressure and

activity, sending data and alerts to the wearer or a caregiver.

Doctors spent $5,275 for non-medical office supplies, which was 9 percent less than our previous survey. Prod-ucts may have included copy paper and printed forms, ink/toner, writing instru-ments, and the like. Given the growing emphasis on “green” business practic-es, doctors surveyed may have looked to reduce or eliminate paper output with EHR and non- or reduced-paper patient communications. Patient portals can allow for dissemination of patient information without printing at all.

Our large segment of millenni-al practitioners may have embraced green business practices given the data that supports their concern for the en-vironment. The Shelton Energy Pulse 2016 from the Shelton Group indicated that in 2016, 63 percent of millennials claimed to be anxious about climate change compared to 46 percent of all other age cohorts. Studies by Nielsen and others indicate that millennials look for brands that have a proven record of social responsibility and en-vironmental friendliness. Major brick-and-mortar office supply retailers have been facing stiff competition from Amazon and other online purveyors of office supplies. In response, companies such as Sta-ples and Office Depot have used more aggressive online marketing tactics, points programs, couponing, free ship-ping with minimum purchase, and other strategies to hold onto their core customer base. We will watch to see how recent store closings impact pric-ing and customer loyalty. Easy, convenient ordering and ul-tra-fast delivery allow doctors to re-duce inventory and staff costs (reduc-ing the time needed to place orders). What’s more, doctors can trim their storage space and cut insurance premi-ums associated with stockpiling their office supplies. With the evolving de-livery systems mentioned earlier—po-tentially same-day drone or pod deliv-ery, for example—we expect doctors’

What Is YourPreferred Method

of Foot Measurementfor Prescribing

Orthotics?

Plaster41%Digital

21%

STS Slipper Sock

11%

PressureTechnology

5%

Foam23%

What Brand ofAthletic FootwearDo You Prescribe/

Recommendthe Most?

New Balance 44% 46%Asics 23% 24%Brooks 17% 17%Apex 2% 2%Saucony 2% 1%Nike 1% 1%Mizuno 1% 0%Others 9% 9%

2017 2018

Easy, convenient ordering and ultra-fast deliveryallow doctors to reduce inventory and staff costs

(reducing the time needed to place orders).



113

PODIATRIC ECONOMICS

doctors to explain and demonstrate product use. The doctor’s recommen-dations can provide peace of mind to patients viewing a confusing array of products online or in a drugstore. Some manufacturers offer doctors as-sistance as well, providing not only in-office kiosks but direct-to-patient shipping programs that simplify re-ordering and tie the patient to the practice. What’s more, today’s newer doctors may have designed their spac-es to incorporate a carefully culled array of products to send the message to waiting patients that their needs can be met in the office. Products sold might have included nail pol-ishes, prefabricated inserts and arch supports, socks/stockings/hosiery, creams/lotions, topical antifungals, and DME items. Some companies even offer private labeling.

The total amount spent on advertising for all media in-

just-in-time inventory systems to re-duce costs even more. Practice management experts sug-gest that those with automatic pur-chasing programs check prices peri-odically to ensure that they are still getting the best deals. Even switching vendors within the Amazon market-place can cut costs. The amount spent on products for sale rose 18 percent from our last survey to $3,922 this year. Overall, there was a slight in-crease in the percentage of income derived from the sale of products from respondents’ offices. In fact, 7 percent said that more than one-fifth of their income came from these products, a jump from 5 percent of respondents last year. The percentage of doctors who dispensed OTC products from their

offices rose slightly to 67 percent, up from 66 percent in our last report. Another 9 percent of doctors surveyed planned on dispensing OTC prod-ucts from their offices in the next 12 months. There was a bigger jump in the percentage of doctors who dis-pensed Rx products from their offices: 23 percent vs. 18 percent. Four per-cent more said that they planned on dispensing prescription products over the next 12 months. The income derived from these products was generally small (the vast majority attributed less than 10 per-cent of their income to these sales). However, a higher percentage of doc-tors than last year reported as high as 20 percent to 30 percent or more of their income came from OTC prod-ucts. Undoubtedly, in-office product sales prevented some incomes from dropping even further than reported. Besides the revenue benefit, OTC sales offer patient convenience and improved compliance, allowing the




114

PODIATRIC ECONOMICS

creased 13 percent this year vs. last, averaging $3,799. Practice open-ing announcements from our larg-er new-doctor segment may be one reason for this increase. Some social media platforms have made it more difficult to reach patients without pay-ing for access, which may have in-creased overall costs as well. Here’s a breakdown of some of the most-used advertising media.

Yellow Pages (print and web)—Twenty-two percent of doctors who advertised used print Yellow Pages, down from 27 percent last year. There has been a fairly consistent drop year-to-year in the percentage of doctors who used print Yellow Pages to advertise their practices. Just 15 years ago, nearly all of those who advertised (99 percent) said that they used print Yellow pages. For many practices, Yellow Pages may not provide an adequate return on investment. The exception would be practices with an elderly popula-tion that is not tech savvy or doctors practicing in an area that has spotty connectivity. Otherwise, prospective patients might use Google to search for a local DPM, then look at his or her reviews and website. Web Yellow Pages usage by ad-vertising doctors dropped from 14 per-cent last year to 12 percent in our most recent survey. Perhaps the drop was not as dramatic as the print ver-sion because of the high-tech nature of the medium and its accessibility via computer, tablet, or smartphone. Some web yellow pages offer mapping

a practice website, which was un-changed from our previous survey. Nearly half of those surveyed were on Facebook (49 percent), up from 46 percent in our last report. Twitter use increased slightly from 13 per-cent to 14 percent. Among the social media platforms listed, only LinkedIn usage dropped: now 20 percent of respondents who advertised, down from 22 percent last year. In our next survey, we may add Instagram, since it is becoming more widely used among physicians. The costs associated with inter-net advertising may have included in-vestments in expert help with search engine optimization, aiming to have their practice websites show up in the top search results based on patient queries. In addition, respondents may have focused on their online reviews and/or revamped their website to be mobile-responsive. Some doctors may have used banner ads on local website and/or couponing on such sites as Grou-pon and LivingSocial. While “organic

technology and even the use of a doc-tor’s photo.

Internet—More than half (53 percent) of doctors who advertised used the internet (that is, paid promo-tion), a 1 percent drop from last year. Again, jumping back 15 years, the impact of the web is apparent: only 13 percent of doctors who advertised at that time used the internet. In our most recent survey, 77 percent of those who advertised had


Survey (from page 113)YOUR OVERHEAD EXPENSES

Advertising+13%

$3,372$3,799

2017 2018

$3,323$3,922

2017 2018

+18%

Computer ServiceMaintenance & Internet

$3,904$3,487

-11%

2017 2018

Internet 54% 53%Yellow Pages (Print) 27% 22%Newspapers 15% 15%Mailings 11% 13%Yellow Pages (Web) 14% 12%Radio 8% 7%TV Cable 5% 5%TV Network 3% 3%

Other 10% 7%Do Not Advertise 22% 23%

2017 2018

Type of Advertising

Products for Sale

Do You Use Foot Measurement

Technology forPrescribing Orthotics?

Yes25%

No75%

Do You IncorporateDigital X-ray

Technology intoYour Practice?

No31%

Yes69%


115

PODIATRIC ECONOMICS

to 2017. However, the influx of so many new practitioners may have bolstered the use of newspapers for advertis-ing, as these doctors in-vest in media that targets their specific location and demographics. Given that a high percentage of patients age 65 and older need podiatric care, newspapers remain a strong way to connect to

this population. Also, many dailies offer an online version, so doctors get a one-two punch with their supplied content or advertising. Weekly newspapers remain one of the strongest ways to connect with a local audience. Often they include health sections where DPMs can not only advertise but may be able to contribute consumer-related podiatric content as well.

Mailings—Thirteen percent of doctors who advertised used mail-ings, up from 11 percent last year. Again, the large percentage of new doctors may have used personalized mailings to introduce their services. Some may have sent personal letters and/or offered one-time discounts via coupon packets like Valpak. Data gleaned from online marketing efforts may have allowed some doc-tors to customize content. Strategies for success in using mailings include using the recipient’s name often, as well as using color, size (bigger is better), unique paper folds, and storytelling to convey your message. Increasing postage rates result

reach”—unpaid postings—can be ef-fective, “pay-to-play” advertising on Facebook, Instagram, and other sites allows doctors to target specific de-mographics. Some DPMs may have created podcasts—digital audio files, often used in a series—to inform and educate their patients. Video was also used, sometimes shot professional-ly but also created on some of the latest smartphones boasting great color accuracy, brilliant details, and high-quality results in various lighting conditions. Up until recently, internet ad-vertising was focused primarily on young to early middle-aged consum-ers. However, doctors may consider targeting older folks as they increas-ingly embrace technology. Accord-ing to Pew Research Center, “there has been significant growth in tech adoption in recent years among older generations—particularly Gen Xers and Baby Boomers.” Its report, enti-tled “Millennials stand out for their technology use, but older genera-tions also embrace digital life,” indi-cates that smartphone owne r sh i p among Baby Boomers (those born between 1946 and 1964) grew from 25 percent in 2011 to 67 percent in 2018. In addition, 52 percent of Baby Boomers said they owned a tablet, and 57 percent used social media. With the oldest of these consum-ers now in their 70s, doctors may consider reshaping their market-ing plans. In the future, AI may be used in prac-tice marketing to target potential patients. It is already being used in some large business-es; we’ll watch for po-tential impacts on the profession in future re-ports. Right now, the big-gest issues faced by doctors using social

media are the “trust gap” and privacy complaints that have dominated the headlines. Breaches of personal data, such as the much-publicized Facebook data scandal, can reduce the effective-ness of doctors’ market-ing efforts. We expect these issues to continue, especially as more online tools become available and hackers improve their ability to break into networks. An interesting note is that ac-

cording to Magna, the research arm of media buying firm IPG Medi-abrands, 2017 was the first year advertisers spent more on digital advertising than tradi-tional television. We have no doubt that dig-ital ad spending will continue to reach new heights.

Newspapers—Fif-teen percent of those who advertised used newspapers, the same percentage as last year. Wi th more and more newspapers fold-ing, and existing publi-cations shrinking their page counts, we would have expected this percentage to drop. In fact, according to Pew Research Center, daily newspaper circulation in the U.S. dropped 11 percent from 2016



No23%

Yes77%

Do You Have aPractice Website?

Is Your Practice Listed

on Facebook?

Yes49%No

51% No86%

Yes14%

Does Your Practice

Use Twitter?

Does Your Practice

Use LinkedIn?

No80%

Yes20%

Do You DispenseOTC Products from

Your Office?

Yes67%

No33%

No77%

Yes23%

Do You DispenseRx Products from

Your Office?


116

PODIATRIC ECONOMICS

digital revenue jumped 9.7 percent. According to BIA, radio was the fifth-highest-used platform by advertisers. (Direct mail, TV, newspaper, and mo-

bile were the top four.) We have yet to feel the impact of iHeartMedia’s Chapter 11 bankruptcy filing in March 2018. The owner of 850+ radio stations covers many in top-tier markets. Meanwhile, compe-tition of streaming services like Apple Music and Spotify continue to com-pete for radio listenership. Syncing devices have become ubiquitous in today’s automobiles, allowing drivers to bypass over-the-air radio entire-ly. We will watch for the continued impact of this technology on radio advertising effectiveness and reach in future reports.

Television—Network and cable television advertising percentages were unchanged from last year, just 3 percent and 5 percent of those who advertised, respectively. Television advertisers face a more splintered audience, so adver-

in higher costs for doctors using this medium for ad-vertising. The U.S. Postal Service raised rates for one ounce by a penny or two annually over the past few years but scheduled a 5 cent jump in early 2019. We will watch for the potential im-pact on overall advertising costs in future surveys.

Radio—Seven percent of doctors who advertised used radio, down from 8 per-cent last year. Partnership/group doctors may be better positioned financially to use this medium at the frequen-cy required to be effective. Often doctors position their commer-cials around health care segments and/or during peak listening for their target market(s). How effective is radio in bringing in patients? Radio network Westwood One partnered with Nielsen Catalina Solutions to determine how a product in the consumer-packaged-goods realm performed and found that radio deliv-ered $12 in sales for every $1 spent on advertising. According to “Brands Need to Join the 21st Century and Tap Into Radio Advertising” in AdWeek, radio alone has a broader reach than TV and smartphones, reaching 228.5 million adults.

According to BIA Advisory Ser-vices’ 2018 Investing In Radio® Mar-ket Report, overall radio advertising revenues dropped 0.2 percent during

our survey year. Competition from other media continues to take its toll on over-the-air revenues, which were down 2 percent. However, radio’s



Net Income, Solo Practice

< 50 51- 76- 101- 126- 151- 176- 201- 251- 301- 351- 401- 451- 501- 601- >700 75 100 125 150 175 200 250 300 350 400 450 500 600 700

11%12%

9%

21%

11%

4%5%

6%

Median Net Income:$118,750 -4%

1% 1%2%

1%0%

1%

7%8%

Inco

me

in T

hous

ands

Median Net Income:$144,750

8%

13%

16%

8% 8%

13%

7%

12%11%

4%

Net Income, Group Practice

-7%

< 50 51- 76- 101- 126- 151- 176- 201- 251- >300 75 100 125 150 175 200 250 300

Inco

me

in T

hous

ands

Partnership/group doctors may be betterpositioned financially to use [radio] at the frequency

required to be effective.

cent from last year. With our lower cost for office space, we presume that there was less square footage to clean and maintain, leading to lower fees. The barrage of new medical of-fices may have required less mainte-nance than older buildings as well.

Besides the expenses listed here, doctors surveyed had $1,452 in additional costs. Ex-

tising dollars may not reach as many eyeballs as they once did. However, in practices with higher ad budgets (perhaps supergroups and the like) that are targeting a large population of those age 65+, television may continue to pay off. Local cable al-lows doctors to penetrate their select-ed geographic area at a much lower cost than network TV.

Other advertising—Among those who advertised, 7 percent used other means to do so. This year’s respon-dents listed a variety of vehicles, in-cluding ballpark banners, magazines, movie theaters, gym advertisements, billboards, church bulletins, calen-dars, Playbills, and telemarketing.

Respondents spent $1,921 on office cleaning and maintenance, up 2 per-



NORTHEAST: CT, NH, NJ, NY, MA, ME, PA, RI, VT

NORTH CENTRAL: IL, IN, IA, KS, MI, MN, MO, NE, ND, OH, SD, WI

SOUTH: AL, AR, DC, DE, FL, GA, KY, LA, MD, MS, NC, OK, SC, TN, TX, VA, WV

WEST: AK, AZ, CA, CO, HI, ID, MT, NV, NM, OR, UT, WA, WY

WESTGross: $206,500

Net: $152,750

EASTGross: $182,750

Net: $119,750

SOUTHGross: $197,000

Net: $134,250

NORTH CENTRAL

Gross: $191,500Net: $143,750

MEDIAN INCOME BY REGIONfor all practice types

Median Net IncomeYears in Practice

<1 year 1-5 years 6-10 years 11-20 years 21-30 years 30+ years

$126,000 $120,000

$158,250$168,000 $167,000

$120,250

Median Net IncomeBoard Certified

$108,750

$149,250

Board Non-Board Certified Certified


118

PODIATRIC ECONOMICS


120

PODIATRIC ECONOMICS

penses cited by this year’s respondents included those for their business automobile(s), parking, travel, bonuses, gifts, staff meetings/lunches, billing services, uniforms, merchant fees, and petty cash. Some doctors suggested that health insurance be listed as a separate line item since its cost has risen faster than other practice expenses. Out-of-pocket payments due to hurricane damage were also noted by some respondents to our latest survey. That is no surprise given that the three biggest during the year surveyed—Harvey, Irma and Maria—were among the five costliest hurricanes in U.S. history, according to the Nation-al Oceanic and Atmospheric Administration.

The median net income for solo practitioners surveyed dropped 4 percent to $118,750. This figure was likely weighed down by the more than one in five (21 percent) surveyed who reported a net income of less than $50,000. Given our large percentage of new doctors, the lower net may reflect the high cost of practice startup.

While partner-ship/group respon-dents also reported a drop in median net income (down 7 percent), theirs was substantially higher than solo colleagues at $144,750. Cross-tabulating median net income by number of years in practice show that for all practice types, income peaked at 11-20 years in prac-tice. In fact, older doctors’ results may have driven down the median for all

practitioners surveyed. Doctors in practice 21-30 years earned 2 percent less than the same group last year, and those in practice more than 30 years netted 8 percent less than the same group last year. Regionally for all practice types, the West fared best, reporting a median net of $152,750, followed by the North Central region ($143,750), the South ($134,250), and the Northeast ($119,750). Doctors in the North Central region kept the highest percentage of their gross income at 75.1 percent. The West’s ratio was 74 percent of gross, while the South kept 68.1 percent and the Northeast netted 65.5 per-cent of their gross revenues. The income gap between men and women podiatrists


2018 2017Voltaren Gel 34% 31%Biofreeze 20% 20%Lidocaine 12% 10%Capsaicin 6% 5%Lidoderm 3% 4%Flector Patch 2% 1%Emla Cream 2% 1%Ben Gay 2% —Ortho-Nesic (Blaine) 1% —Others 7% 11%

Prescriptions per week 4.3 4.7

Topical Pain Relievers

narrowed compared to our previous re-port. Men reported a median net in-come of $147,500, while women re-ported $113,500, or 77 percent of men’s earnings. The me-dian figure for men fell 3 percent vs. last year, while women’s earnings jumped 10 percent. Despite this increase, the gap is larger than the BLS for our survey peri-od, which reported that in the health care practitioners and technical occupations category, women earned 80 percent of men’s earnings. (Interestingly, this category of wage earners lagged behind the 82 percent gap reported for all BLS-listed occupations.) Membership in the APMA had a positive impact on net income. APMA members reported a median net income of $138,500, which was 23.1 percent higher than the $112,500 reported by non-APMA members. Board Certification had an even bigger impact on in-come. Board Certified DPMs reported a median net income that was 37.2 percent higher than non-Board Certified doc-tors: $149,250 vs. $108,750, respectively.

Our annual survey continues our long-standing process of tracking respondents’ pharmaceutical prescription pat-terns across applicable categories. Doctors indicated which

PRESCRIBING & IN-OFFICE DISPENSING


Median Net IncomeComparison by Sex

Men Women

$147,500

$113,500

Median Net IncomeAPMA Member

$112,500

$138,500

Member Non- member

NET INCOME


121

2018 2017EpiFix (Mimedx) 18% 15% Apligraf 8% 8%Dermagraft 7% 5%Grafix 7% 8%Integra 4% 5%Oasis 2% 2%Acell 2% 2%Primatrix 2% 1%Amnioexcel 1% 1%Graft Jacket 1% 1% Others 5% 4%


Graft Products (for Wounds)

PODIATRIC ECONOMICS

PRESCRIBING & DISPENSING

2018 2017Ibuprofen 16% 14% Norco 11% 13% Tylenol 11% 11%Percocet 11% 13% Advil 10% 7% Hydrocodone 9% 11% Aleve 8% 9% Motrin 6% 6%Tylenol #3 4% 4%Vicodin 4% 3% Ultram 3% 4% Lortabs 1% 1%Others 1% 1%


Analgesics(Oral)

Enzymatic Debriding Agents

2018 2017Betamethasone 22% 20% Triamcinalone 20% 18%Hydrocortisone 16% 14% Lotrisone 8% 7%Topicort 8% 8% Lidex 4% 6%Diprolene 3% 4%Kenalog 3% 2%Medrol 2% 2% Temovate 2% 3%Aristocort 1% 1%Others 2% 3%


Steroids (Topical)

2018 2017Lamisil 83% 80% Diflucan 2% 4%Gris- PEG 1% 2%Others 1% 2%


Antifungal (Oral)

2018 2017Santyl 66% 63% Medihoney 4% 4% Amerigel 3% 2% Accuzyme 3% 1% Kerasal 2% 1% Elase 1% 1% Panafil 1% 2% Others 0% 1%


2018 2017Bacitracin 18% 13%Bactroban 13% 16%Neosporin 10% 11%Betadine 10% 12%Triple Antibiotic 10% 7%Mupirocin 8% 6%Silvadene 6% 10%Amerigel 5% 6%Gentamicin 5% 3%Iodosorb 2% 3%Povidone- Iodine 2% 1%Polysporin 2% 2%Others 0% 2%


Antiseptics/Topical Antibiotics


122

PODIATRIC ECONOMICS

included TV, magazine, digital, news-paper, radio, and out-of-home adver-

pharmaceuticals, by brand name, they prescribed, recommended, or dis-pensed from their office, and which brand primarily from each category (see charts). As new drugs reach the market and become widely used, their data will be added to our charts. In 2017, pharmaceutical com-panies spent $6.1 billion on di-

rect-to-consumer advertising, a 4.6 percent drop from 2016, according to data from Kantar Media. This figure



2018 2017Cephalexin 27% 29%Augmentin 20% 22%Keflex 14% 17%Bactrim 11% 10%Doxycycline 7% 7%Amoxicillin 4% 2%Clindamycin 3% 2%Cipro 3% 1%Duricef 2% 2%Ceftin 1% 1%Levaquin 1% —Cleocin 1% —Others 1% 1%


Antibiotics (Oral)

2018 2017Lamisil 16% 14%Lotrisone 11% 10%Naftin 10% 8%Lotrimin 8% 8%Loprox 8% 7%Formula 3 7% 7% Spectazole 6% 9%Clarus (Bako) 5% 6%Ecoza 3% 1%Fungi- Foam 3% 3%Nizoral 3% 3%Oxistat 2% 1%Ertaczo 2% 1%Luzu 2% 3%Cidacin 1% 1%Others 9% 11%


Topical Dressingsfor Matrixectomies

2018 2017 Amerigel 16% 21%Bacitracin 15% 11%Silvadene 10% 9%Neosporin 9% 8%Triple Antibiotic 9% 9%Bactroban 7% 7%Cortisporin Otic 5% 5%Betadine 5% 5%Band- Aid 3% 3%Gauze 2% 3%Gentamicin 2% 2%Polymem 1% 1%Dermagraft 1% —Others 1% 4%


Antifungal (Topical) (Skin)

2018 2017Ibuprofen 17% 15%Meloxicam 16% 18%Naprosyn/Naproxen 12% 15%Mobic 9% 10%Advil 9% 6%Aleve 8% 9%Diclofenac 8% 5%Duexis 7% 5%Celebrex 2% 2%Motrin 2% 5%Voltaren 2% 3%Relafen 1% 2%Anaprox 1% —Feldene 1% 1%Others 3% 3%


Anti Inflammatories(Oral)


In 2017, pharmaceutical companies spent$6.1 billion on direct-to-consumer advertising,

a 4.6 percent drop from 2016.


124

Most Prescribed, Recommended and/or Dispensed: 1. Cantharidin/Cantharone 2. Salicylic Acid/ Sal Acid Plaster 3. Compound W

2018 2017Cantharidin/Cantharone 24% 19%Salicylic Acid/Sal Acid Plaster 14% 18%Compound W 6% 4%Aldara 6% 6%Duofilm 6% 7%Mediplast 5% 5%Canthacur 4% 5%Efudex 3% 3%Vircin 3% 1%Formadon 2% 1%Verucide 1% 2%Lazerformalyde 1% 2%Wartpeel 1% 1%Durasal 1% —Virasal 1% 2%Others 5% 9%


2018 2017AmLactin 30% 23%Lac- Hydrin 9% 10%Urea 40% 9% 10%Kera- 42 (Bako) 6% 7%Eucerin 6% 7%Carmol 40 5% 4%Cerave 4% 3%Aquaphor 3% 3%Amerigel 3% 2%Gormel 3% 2%Kamea 3% 3%Foot Miracle 2% 4%RevitaDerm 2% 4%Kerasal 1% 1%Flexitol Heel Balm 1% 1%Fungi- Foam 1% 1%MD Private Label 1% —Others 4% 4%


Most Prescribed, Recommended and/or Dispensed: 1. AmLactin 2. Lac-Hydrin 3. Urea 40%

Emollients/MoisturizersWart Medications

PODIATRIC ECONOMICS

prove to be useful especially for pa-tients with Type 2 diabetes, which affects more than a single organ.tising. Ad executives say television and

print continue to be the media of choice, as they are used by the target audience (generally, middle-age and older adults), and they provide ample time and space to include the safety and efficacy infor-mation required by regulators.

One pharmaceutical trend that may impact how podiatrists practice in the future is the increased speed of new drugs entering the market. According to “Chipping Away at Dis-ease—and Drug Testing” (The Fu-ture of Everything, Nov./Dec. 2018), “Bringing a new drug to market takes roughly a decade and requires expen-

sive and arduous testing on humans and animals. But a new technology developed at the Massachusetts Insti-tute of Technology aims to cut that time by half and perhaps replace animal test ing entirely.” Called “the body on a

chip,” the device “is designed to show scientists how a drug af-fects individual organs and the body as a whole.” According to the report, i t may



2018 2017Drysol 35% 33%Betadine 13% 15%Certain Dry 10% 10%Bromi Lotion 4% 4%Lazerformalyde 4% 4%Formadon 3% 4%Tineacide Shoe Spray 3% 2% On Your Toes 2% 1%Onox 1% 1%Others 6% 5%


Most Prescribed, Recommended and/or Dispensed: 1. Drysol 2. Betadine 3. Certain Dry

Drying Agents (for Odor)



One trend that may impact how podiatrists practice in the future is the increased speed

of new drugs entering the market.


126

PODIATRIC ECONOMICS

Stephanie Kloos Donoghue of Ardsley, NY, writes and lectures on management, mar-keting, and economic trends, and has analyzed podiatric and other medical professional data for more than three decades. She is a small business owner, consultant, and an Adjunct Assistant Professor of Management at Pace University’s Lubin School of Business in Pleasantville, NY. She teaches Small Business Management and has lectured on Venture Initiation and Entre-preneurship. Learn more at skloos.com. Data was compiled and tabulated by Thomas Lewis, MBA, of Hartsdale, NY. Lewis is a research professional with extensive ex-perience in the planning and implementation of research programs designed to gauge audi-ence and information delivery across all print media platforms. He currently serves as the Editor-in-Chief and Primary Media Analyst for the Housing and Urban Development Daily News Brief, TechMIS LLC. His survey research experience includes senior positions at GfK MRI, the leading print media audience research organization servicing all major publishers and media buying agencies. Research assistance was provided by Megan Donoghue, BS, CHES, CHC.

We expect medical marijuana ap-plications, such as for use with diabetic peripheral neuropathy, to continue to be researched and covered in this mag-

azine. In addition, amid today’s opioid crisis, we anticipate further discussion of pharmaceutical alternatives to treat patients’ chronic pain. The movement toward natural remedies—especially among millennials—may impact prac-tice as patients bypass doctor interven-tion altogether. Lastly, we see convenience play-

ing a bigger role in medication manage-ment in the future, particularly as con-sumers become accustomed to receiv-ing online orders—of just about any-thing—within a day or two. Rx home delivery companies such as GoodRx

and PillPack, a subsidiary of Amazon that was acquired in 2018, are capitaliz-ing on this trend. Large drug chains are advertising their home delivery services as well. We will follow this trend’s im-pact on the pharmaceutical industry as a whole and, more specifically, on survey respondents who dispense Rx products from their offices. PM


2018 2017Amerigel 11% 13%Santyl 11% 12%Bactroban 9% 12%Silvadene 7% 10%Betadine 7% 5%Medihoney 7% 5%Iodosorb 6% 6%Neosporin 5% 3%Triple Antibiotic 5% 2%Aquacel 4% 3%Hydrogel 3% 2%Prisma 3% 3%Gentamicin 2% 2%Helix 2% 1%Regranex 2% 2%Polymem 1% 1%Pureaply 1% 1%Saline 1% —Others 2% 3%


Wound/Ulcer (Topical, Non-Graft)

Most Prescribed, Recommended and/or Dispensed: 1. Amerigel, Santyl 2. Bactroban 3. Silvadene

2018 2017Formula 3/Formula 7 11% 11%Penlac 11% 9% Jublia 8% 11%AmLactin 7% 6% Clarus (Bako) 7% 10% Clotrimazole 6% 8% Urea 40% 6% 6% Kerydin (Pharmaderm) 6% 4% Tolcylen 5% 1%Kerasal 4% 4% Carmol 3% 2% Lamisil 2% 3% Naftin 2% 1% Tineacide 2% 2% Terpenicol 1% —Fungi-Foam 1% —Gordochom 1% —Nonyx 1% —RevitaDerm 1% 1%Others 3% 5%


Most Prescribed, Recommended and/or Dispensed: 1. Formula 3/7, Penlac 2. Jublia 3. AmLactin

Antifungal (Topical) and Keratin Debris Exfoliants (Nail)


Amid today’s opioid crisis, we anticipate further discussion of pharmaceutical alternatives

to treat patients’ chronic pain.


ADVERTISERS’ INDEX

ADVERTISER WEBSITE PHONE PAGE

20/20 Imaging ..............................................................2020imaging.net .............................866-734-6234 .............................37

20/20 Imaging ..............................................................2020imaging.net .............................866-734-6234 .............................75

All-Pro Imaging ............................................................allpro-imaging.com .........................516-433-7676 ........................... 107

American Academy of Podiatric Practice

Management (AAPPM) ...........................................aappm.org ......................................517-484-1930 .............................56

American Board of Foot and Ankle Surgery (ABFAS) .......abfas.org ........................................415-553-7800 ............................117

American Board of Lower Extremity Surgery (ABLES) .....ables.org ........................................248-855-7740 .............................19

American Board of Podiatric Medicine (ABPM) ...............abpmed.org ....................................310-375-0700 ........................... 127

AMERX .......................................................................amerxhc.com .................................800-448-9599 ...............................7

AMERX .......................................................................amerxhc.com .................................800-448-9599 ............................101

Amlactin ......................................................................amlactin.com ................................................................................ 125

Anodyne ......................................................................anodyneshoes.com .........................(844) 637-4637 ..........................13

Apis Footwear ..............................................................apisfootwear.com ...........................888-YES-APIS (937-2747) ...........15

Arche Healthcare ..........................................................archehealthcare.com .......................866-385-6442 .............................42

A Step Above ................................................................astepabovehealth.com ....................877-448-6233 .............................14

Atlas Foot Alignment Institute .......................................atlasfai.com/benefits ......................877-567-1034 ....................cover tip

Bako Diagnostics ..........................................................Bakodx.com ...................................855-422-5628 ............................. 11

Bergmann Labs .............................................................bergmannlab.com ...........................800-323-8267 ........................... 156

Bianco Brothers ............................................................BiancoBrothers.com .........................................................................38

BioStep ........................................................................biosteportho.com............................818-373-0010 .............................68

Blaine Labs ..................................................................blainelabs.com ...............................800-307-8818 .............................53

Bryhali (Ortho Dermatologics) ...................................................................................................................... insert bet. 82 & 83

Comfort Fit ...................................................................comfortfitlabs.com ..........................888-523-1600 .............................17

Comfort Fit ...................................................................comfortfitlabs.com ..........................888-523-1600 ........................... 131

Comfort Fit ...................................................................comfortfitlabs.com ..........................888-523-1600 ........................... 105

Curamedix....................................................................curamedix.com ...............................401-333-6500 .............................96

Cutting Edge Laser Technologies ....................................celasers.com ...................................800-889-4184, x400 .................... 21

DaniPro (Alde) .............................................................danipronailpolish.com ....................985-DANIPRO ............................34

Darco ...........................................................................darcointernational.com ...................800-999-8866 .............................85

DiaFoot ........................................................................dia-foot.com ...................................877-405-3668 .............................76

Dr Jill’s Foot Pads .........................................................DrJillsFootPads.com ........................866-FOOTPAD ........................... 81

DT Insurance ................................................................dtinsuranceagency.com ...................866-516-6046 .............................63

Forward Motion/JM Orthotics ........................................FDMotion.com ...............................800-301-5835 ...insert bet. 114 & 115

Global Intermed ............................................................globalintermed.com ........................440-333-0007 ........................... 149

Go4D ...........................................................................go4-d.com ......................................888-353-4843 .............................45

Gordon Labs .................................................................gordonlabs.net ...............................800-356-7870 ...............................2

The companies and organizations listed at the end of this report are the sponsors for this year’s Annual Practice Survey. They have made it possible for PM to collect, organize, and disseminate the formidable amount of data used to create this once-a-year analysis of the profession. Please support them by emailing, calling, or visiting their websites.

http://www.2020imaging.net

http://www.2020imaging.net

http://www.allpro-imaging.com

http://www.aappm.org

http://www.abfas.org

http://www.abpmed.org

http://www.amerxhc.com

http://www.amlactin.com

http://www.anodyneshoes.com

http://www.apisfootwear.com

http://www.atlasfai.com/benefits

http://www.bakodx.com

http://www.bergmannlab.com

http://www.biancobrothers.com

http://www.biosteportho.com

http://www.blainelabs.com

http://www.celasers.com

http://www.curamedix.com

http://www.danipronailpolish.com

http://www.DrJillsFootPads.com

http://www.dtinsuranceagency.com

http://www.FDMotion.com

http://www.globalintermed.com

http://www.go4-d.com

http://www.gordonlabs.net

http://www.amerxhc.com

http://www.bryhali.com

http://www.comfortfitlabs.com

http://www.ables.org

http://www.archehealthcare.com

http://www.stepabovehealth.com



http://www.darcointernational.com

http://www.dia-foot.com


ADVERTISERS’ INDEX

Greenbranch .................................................................mpmnetwork.com ..........................800-933-3711 ........................... 147

GuardianGel Socks ........................................................GuardianGelSocks.com ...................800-484-9086 .............................33

Hippocratic Solutions ....................................................hippocraticsolutions.com ................866-305-3911 ............................. 41

International Foot and Ankle Foundation (IFAF) .............internationalfootankle.org ...............866-286-6973 ............................111

IPED ............................................................................podiatricexcellence.org ....................978-296-7634 .............................82

Jan L ............................................................................janlinc.com ....................................609-261-1133 .............................25

Jan L ............................................................................janlinc.com ....................................609-261-1133 ............................. 91

Jublia (Ortho) ...............................................................jubliarx.com ............................................................................ 29 & 30

Kent State University College of Podiatric

Medicine (KSU) ......................................................kent.edu/cpm/continuing-education .................................................67

Medicool ......................................................................medicool.net ..................................800-433-2469 ........................... 123

Midmark ......................................................................midmark.com .................................800-midmark .............................79

Midwest Podiatry Conference ........................................midwestpodconf.org ...................................................................... 103

Mississippi Podiatric Medical Association .......................mspma.net .................................................................................... 129

MSI ..............................................................................msiorthoticlab.com .........................480-755-8600 ........................... 148

Nolaro ..........................................................................whatsmyfoottype.com .....................877-792-4669 .............................58

OHI ..............................................................................safestep.net ....................................800-956-1382 ...............................5

OHI ....................................................................................................................................800-745-9801 .............................95

Ortho-Rite ....................................................................ortho-rite.com ................................914-235-9100 ........................... 155

Pedifix..........................................................................pedifix.com ....................................800-424-5561 .............................23

Ped-Lite ........................................................................pedlite.com ....................................219-756-0901 .............................89

Physician Claim ............................................................physicianclaim.com ........................877-385-0257 ............................119

Pilgrim Shoes ...............................................................pilgrimshoes.com ...........................888-493-2859 .............................72

Podiatry Institute ..........................................................podiatryinstitute.com ......................888-833-5682 .............................54

Present Podiatry Online Board Review ............................podiatry.com ................................................................................... 51

Richie Brace .................................................................richiebrace.com ..............................877-359-0009 ...............................9

SOS Healthcare Management Solutions ..........................soshms.com ...................................866-TEAMSOS (832-6767) ..........64

SuperbonesSuperwounds ..............................................SuperbonesSuperWoundsEast.com ...888-802-8410 .............................49

Surefit/PADNet .............................................................biomedix.com and surefitlab.com ....800-298-6050 .............................60

SureStep .......................................................................surestep.net ...................................877-462-0711 .............................52

Tetra ............................................................................thetetracorp.com .............................................................................27



Tetra ............................................................................thetetracorp.com ............................................................................. 71




Western Foot and Ankle Conference ...............................thewestern.org ...............................800-794-8988 .............................46

Wise Consumer Products ..............................................frankincensemyrrh.com ...................................................................24

ADVERTISER WEBSITE PHONE PAGE

http://www.mpmnetwork.com

http://www.guardiangelsocks.com

http://www.hippocraticsolutions.com

http://www.janlinc.com

http://www.jubliarx.com

http://www.kent.edu/cpm/continuing-education

http://www.medicool.net

http://www.midmark.com

http://www.midwestpodconf.org

http://www.whatsmyfoottype.com

http://www.safestep.net

http://www.safestep.net/orthoticsuite

http://www.ortho-rite.com

http://www.pedifix.com

http://www.pedlite.com

http://www.soshms.com

http://www.richiebrace.com

http://www.superbonessuperwoundseast.com

http://www.thetetracorp.com

http://www.janlinc.com

http://www.physicianclaim.com

http://www.pilgrimshoes.com

http://www.internationalfootankle.org

http://www.mspma.net

http://www.calyxbraces.com

http://www.podiatryinstitute.com

http://www.podiatry.com

http://www.frankincensemyrrh.com

http://www.thewestern.org

http://www.podiatricexcellence.org

http://www.surefitlab.com

http://www.biomedix.com

http://www.surestep.net

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